Category Archives: Bahrain

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Islamic Certification for Swiss Firm Opens Middle East Market

A Swiss-based fintech firm has successfully been certified by Islamic scholars, enabling it to trade digital currency in the Middle East.

Sharia law prohibits Muslims from lending money to anybody with the expectation of receiving interest on this amount. It regards fractional reserve lending that the majority of fiat currencies operate with as usury. Cryptocurrencies differ in this respect as they are underpinned by logistics of scarcity, appreciated by those practicing Sharia as it acts similarly to commodity trading such as gold that they adhere to.

With the news earlier this year that cryptocurrencies wouldn’t, in most circumstances, conflict with Sharia Law, the number of fintech companies moving into Sharia-compliant finance has notably increased. The Middle East, with its large Muslim population, has also become a potential hotspot for blockchain development.

The Swiss company X8 AG claims that its Ethereum-based cryptocurrency will address concerns of some Islamic scholars who are often concerned about the religious validity of cryptocurrency’s price volatility and the types of assets behind them. X8 Director Francesca Greco maintains that the fact that their cryptocurrency is backed by a basket of eight fiat currencies and gold should be a convincing enough guarantee. Greco maintains, “The Gulf region is a really good place for financial technology companies because they all want to become hubs for fintech.”

The Zug-based company which has now gained its certification from the Shariyah Review Bureau (SRB), an Islamic advisory firm licensed by Bahrain’s central bank, hopes to launch a crypto-exchange that would include a Sharia-compliant component. It has recently had meetings with other exchanges in the region.

This follows an announcement last week that another Islamic financial center, Dubai, was about to get its first cryptocurrency exchange after local media Al Zarooni Group and the Crypto Bulls announced the launch of the Crypto Bulls Exchange. Chairman of the Al Zarooni Foundation, Suhail Al Zaroon, stated:

“This will be the milestone for getting global investments opportunity from all over the globe in UAE, as all financial techs and investors are looking forward in crypto and blockchain industry.”

 

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London Mosque Exceeds Ramadan Crypto Donations Target

A London mosque has announced that it has successfully reached and exceeded its target of donations over the Ramadan period which consisted mainly of cryptocurrency, according to Bitcoinist.

Bitcoin News reported in May that the first mosque for Turkish Cypriots in the UK, the Masjid Ramadan, had decided to accept Ethereum in order to carry out essential repairs.

Leaders at the mosque made the decision in May to accept the cryptocurrency as part of the Muslim observance of Zakat, the annual donation made by all of that faith. They set a target of GBP 10,000 for the renovations and invited those with cryptocurrency to donate in the hope that the community would come to the rescue.

The final donation tally came to GBP 13,983 (USD 18,511) consisting of 24 donations from around the world. Mosque chairman Erik Gurney was pleased to announce that the call for cryptocurrency has been a great success as it made up the larger part of the donation, with only GBP 3,460 (USD 4,582) being received in cash. Gurney stated:

“Many people at the mosque were initially skeptical about us accepting this new money, but the fact we received four times more in cryptocurrency donations shows how important it is to be open to these new digital currencies.”

The mosque decided to take the crypto route for donors once it partnered up with London start-up Combo Innovation. It had established that such donations were not in violation of Sharia law which was a concern to some at the time.

At a recent conference in Bahrain earlier this year, leading Islamic scholars decided that Bitcoin and other digital currencies fell into the category of ribawa. This means that cryptocurrency must be exchanged in equal measure, and with immediate transfer of possession, to avoid breaking Sharia law.

Masjid Ramadan managed to observe the law by ensuring that donations were transferred straight from the mosque website to the bank’s cryptocurrency hard wallet before being converted to sterling.

There is still some debate whether cryptocurrency and ribawa can be in tandem when it comes to Sharia law and some clerics have continued to express their own concerns. The Turkish Directorate of Religious Affairs has declared:

“Buying and selling virtual currencies is not compatible with religion at this time because of the fact that their valuation is open to speculation, they can be easily used in illegal activities like money laundering and they are not under the state’s audit and surveillance.”

 

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